One remark/question here. The fact that they will be using 9ktpa LCE to produce 10ktpa LiOH means that they are not talking about LiOH but about LiOH.H2O. LiOH has a higher Lithium content then LCE so you could never produce more LiOH then you get LCE. LiOH.H2O has a slighly lower Lithium content then LCE and thus it matches that 9000ktpa would give about 10ktpa LiOH.H2O.
Seems to be the trend these days to talk about LiOH but actually mean LiOH.H2O. One has to be careful with that as LiOH typically get a higher price then LCE (as it has more Lithium) whereas LiOH.H2O gets a lower price (as it has less Lithium). Also clear why companies are now talking about LiOH although they should actually be talking about LiOH.H2O. Of course it makes perfect sense to produce LiOH.H2O because the storage and transport of LiOH is rather tricky. So better to solve it in water (H2O) where typically 56% of the solution is LiOH and 44% is water.
Also now 100% clear that the ORE production will not be 35ktpa LCE plus 10ktpa LiOH.H2O but just 35ktpa LCE. I was a bit slow in understanding that and frankly must say that I do not really see the business case for doing this. Converting LCE into LiOH.H2O just adds costs as the sales price of both is practically the same. Would only be a good business case if one would produce it directly at ORE... On the long term having a LCE to LiOH.H2O conversion plant may be a good thing to have but has very little to do with the LCE production from brine in Argentina. I hope ORE stays focused on Olaroz!
Anyway, fully realizing these two facts does impact my (simple) SP calculation of ORE a bit. But with the SP now at $3 I still see some really good upside potential.
ORE Price at posting:
$3.08 Sentiment: Buy Disclosure: Held
